How the Media Impacts the Market
Earlier this week I wrote about the Economic Outlook 2007 conference I attended. Two highly respected authorities on the economy and real estate in Phoenix, Arizona spoke to the fact that the current state of the market is more “normal” and the past few years of boom were an anomaly. I felt rather positive after leaving the conference and spent the next few days telling many the message I learned.
Then I turned on the evening news.
Two local stations were both doing stories on the poor state of the housing market. One did a
feature on desperate sellers who were resorting to auctioning their home. Another story featured a local seller who was offering a new motorcycle with the sale.
The next morning a national news program ran a story on challenging an agent to sell a house in one week. Each day they check in with her to see how things are going and speculate on how successful she might be.
Rarely can I have a conversation without someone asking me how I am handling the ‘bad real estate market’. I can quote positive sales figures until I’m blue in the face and it won’t matter. Inevitably the person I am speaking with will tell me I must be wrong because they heard on the news or read in the paper that the housing market is bad, the bubble is burst, and people are losing money.
Yes, the market has slowed and the rate of appreciation has certainly decreased from the past few years but all is not lost. How do we go about educating the consumer that things are not as bad as they hear on the evening news?
Thursday, September 28, 2006
Wednesday, September 27, 2006
What is a Normal Real Estate Market?
What is a Normal Real Estate Market?
Last Thursday I attended the Economic Outlook 2007 conference at the Arizona Biltmore. There was a wealth of information provided. I was most interested in the views of Elliott D. Pollack on the future of the Phoenix economy and RL Brown’s opinion of the future of the Phoenix housing market.
While I could write volumes on all of the information, it all boiled down to the real estate market in Phoenix is normal. Yep, normal. OK, maybe the definition of normal is a little broad but basically the 2003-2005 years were abnormal. An anomaly.
The general consensus is the builders over-built, interest rates rose, housing prices increased creating a ‘perfect storm’. Between in increase in prices and the increase in interest rates, affordability went down leaving fewer qualified buyers. The builders over built (approximately 20,000 units over) because the speculators were buying homes faster then they could be built. Builders also increased prices because supply and demand led them to believe they could. At a certain point, it had to stop.
Today we find the Phoenix market saturated with inventory. Builders are offering insane incentives to unload the home they over built. Sellers of existing properties are still over pricing their homes because they cannot adjust to a normal appreciation rate. REALTORS are abundant and clamoring for clients.
What does it all mean? Yes, days on market are significantly longer then that of 2003-2005. Yes, there is a back log of inventory available (currently about 7 months). Yes, it is harder for the average person to afford a home. However, there are still over 130,000 people a year moving to the Valley. These people need homes. We just need to adjust our thinking. Adjust our way of doing business. Learn to appreciate how great the market was and accept the reality of what the market is now.
Last Thursday I attended the Economic Outlook 2007 conference at the Arizona Biltmore. There was a wealth of information provided. I was most interested in the views of Elliott D. Pollack on the future of the Phoenix economy and RL Brown’s opinion of the future of the Phoenix housing market.
While I could write volumes on all of the information, it all boiled down to the real estate market in Phoenix is normal. Yep, normal. OK, maybe the definition of normal is a little broad but basically the 2003-2005 years were abnormal. An anomaly.
The general consensus is the builders over-built, interest rates rose, housing prices increased creating a ‘perfect storm’. Between in increase in prices and the increase in interest rates, affordability went down leaving fewer qualified buyers. The builders over built (approximately 20,000 units over) because the speculators were buying homes faster then they could be built. Builders also increased prices because supply and demand led them to believe they could. At a certain point, it had to stop.
Today we find the Phoenix market saturated with inventory. Builders are offering insane incentives to unload the home they over built. Sellers of existing properties are still over pricing their homes because they cannot adjust to a normal appreciation rate. REALTORS are abundant and clamoring for clients.
What does it all mean? Yes, days on market are significantly longer then that of 2003-2005. Yes, there is a back log of inventory available (currently about 7 months). Yes, it is harder for the average person to afford a home. However, there are still over 130,000 people a year moving to the Valley. These people need homes. We just need to adjust our thinking. Adjust our way of doing business. Learn to appreciate how great the market was and accept the reality of what the market is now.
Monday, September 25, 2006
A little Slice of Heaven in the Desert
A Little Slice of Heaven in the Desert
I’ll admit a few might find that headline a bit inflammatory but what can I say? The Cleveland Indians are coming to Goodyear! The Indians are close to signing a deal with Goodyear to move their spring training from Florida to Arizona’s Cactus League.
Goodyear has been working for some time now to snag at least one team. This is yet another major development for the West Valley. Current proposal for the facility is a site located near Yuma and Estrella Parkway near the Goodyear City Center. Should Goodyear sign the Indians to this agreement there is an excellent chance that another team will also sign so as not to leave the Cactus League with an odd number of teams.
Once the Indians sign the proposal will need approval from the Tourism and Sports Authority to help provide funds. If all moves ahead, development on the $77.5 million facility should be complete by February 2009. Also proposed for the site is a mixed-used open-air style shopping area.
Any news of a spring training team in Goodyear would have thrilled me. Having been born and raised in Cleveland, I’m just a little partial to the Cleveland Indians and am looking forward to attending many spring training games in the future.
I’ll admit a few might find that headline a bit inflammatory but what can I say? The Cleveland Indians are coming to Goodyear! The Indians are close to signing a deal with Goodyear to move their spring training from Florida to Arizona’s Cactus League.
Goodyear has been working for some time now to snag at least one team. This is yet another major development for the West Valley. Current proposal for the facility is a site located near Yuma and Estrella Parkway near the Goodyear City Center. Should Goodyear sign the Indians to this agreement there is an excellent chance that another team will also sign so as not to leave the Cactus League with an odd number of teams.
Once the Indians sign the proposal will need approval from the Tourism and Sports Authority to help provide funds. If all moves ahead, development on the $77.5 million facility should be complete by February 2009. Also proposed for the site is a mixed-used open-air style shopping area.
Any news of a spring training team in Goodyear would have thrilled me. Having been born and raised in Cleveland, I’m just a little partial to the Cleveland Indians and am looking forward to attending many spring training games in the future.
Saturday, September 09, 2006
Breaking the Law, Bending the Rules
Breaking the Law, Bending the Rules
This has been one of those really strange weeks. I received a call early in the week about a property I have listed. It is a large parcel of land listed for over one million dollars. The caller asked “do you plan on using a 1031 Exchange once the property is sold?” Well, based on the way the question was phrased, I was hesitant to answer. Anyone who knows their way around a 1031 Exchange knows you have to initiate the exchange prior to close-of-escrow. Of course, I was also considering that it was just a case of bad semantics but either way, I was not going to compromise the client by answering the question.
So I replied the best way I knew how, I asked “why do you ask?” Big mistake, huge. I should have gone with my gut instinct and gotten off the phone as fast as I could.
The caller then launched into his pitch on TIC’s. I tried to stop him. The first thing out of my mouth was “I do not have a securities license and therefore I do not involve myself in TIC’s”. He was not to be stopped. He then felt the need to wash me of my ignorance and show me the TIC light. By the time I got off the phone, not only was I frustrated, I knew I did not want to do business with him in the future.
I am a 1031 Exchange fanatic. If I was 10 years old again, I would replace the Andy Gibb poster hanging over my bed with a 1031 Exchange poster (pathetic, huh?). 1031 Exchanges are splendid when done correctly. As a result of my worship for the 1031, I have spent countless hours becoming educated on all aspects. Including the use a 1031 Exchange into a TIC.
The SEC views most TIC’s as securities although the IRS views all TIC’s as real estate. The National Association of Realtors estimates 10 percent of TIC’s are structured as real estate and not securities. This means 90 percent are securities, which I am not licensed to sell. Ninety percent is a huge chunk of the market. Large enough that I choose to direct my 1031 Exchange clients who are interested in TIC’s to the proper licensed individuals to assist them with their needs. Why? I value my license and I take the REALTOR Code of Ethics seriously.
This makes sense to me. My husband is an aerospace engineer. I have on occasion read some of his airplane engineer magazines (engrossing stuff). This does not qualify me to work on aircraft. My knowledge of 1031 Exchanges and TIC’s still does not qualify me to sell securities.
Back to my phone call…
The caller insisted to me that he could pay me a ‘referral’ fee for sending my TIC clients his way. My ulcer started to act up just a bit when he said this. He also was exceptionally persistent in letting me know how little I understood about 1031 Exchanges. He told me he could structure things in a way I would be comfortable. He told me not to worry he would make sure everything was legal. He told me how he could make me ‘painfully wealthy’ (his words, not mine) in the future. I hung up.
He was correct about one thing, I did have pain. Then I had some Maalox and went back to work.
This has been one of those really strange weeks. I received a call early in the week about a property I have listed. It is a large parcel of land listed for over one million dollars. The caller asked “do you plan on using a 1031 Exchange once the property is sold?” Well, based on the way the question was phrased, I was hesitant to answer. Anyone who knows their way around a 1031 Exchange knows you have to initiate the exchange prior to close-of-escrow. Of course, I was also considering that it was just a case of bad semantics but either way, I was not going to compromise the client by answering the question.
So I replied the best way I knew how, I asked “why do you ask?” Big mistake, huge. I should have gone with my gut instinct and gotten off the phone as fast as I could.
The caller then launched into his pitch on TIC’s. I tried to stop him. The first thing out of my mouth was “I do not have a securities license and therefore I do not involve myself in TIC’s”. He was not to be stopped. He then felt the need to wash me of my ignorance and show me the TIC light. By the time I got off the phone, not only was I frustrated, I knew I did not want to do business with him in the future.
I am a 1031 Exchange fanatic. If I was 10 years old again, I would replace the Andy Gibb poster hanging over my bed with a 1031 Exchange poster (pathetic, huh?). 1031 Exchanges are splendid when done correctly. As a result of my worship for the 1031, I have spent countless hours becoming educated on all aspects. Including the use a 1031 Exchange into a TIC.
The SEC views most TIC’s as securities although the IRS views all TIC’s as real estate. The National Association of Realtors estimates 10 percent of TIC’s are structured as real estate and not securities. This means 90 percent are securities, which I am not licensed to sell. Ninety percent is a huge chunk of the market. Large enough that I choose to direct my 1031 Exchange clients who are interested in TIC’s to the proper licensed individuals to assist them with their needs. Why? I value my license and I take the REALTOR Code of Ethics seriously.
This makes sense to me. My husband is an aerospace engineer. I have on occasion read some of his airplane engineer magazines (engrossing stuff). This does not qualify me to work on aircraft. My knowledge of 1031 Exchanges and TIC’s still does not qualify me to sell securities.
Back to my phone call…
The caller insisted to me that he could pay me a ‘referral’ fee for sending my TIC clients his way. My ulcer started to act up just a bit when he said this. He also was exceptionally persistent in letting me know how little I understood about 1031 Exchanges. He told me he could structure things in a way I would be comfortable. He told me not to worry he would make sure everything was legal. He told me how he could make me ‘painfully wealthy’ (his words, not mine) in the future. I hung up.
He was correct about one thing, I did have pain. Then I had some Maalox and went back to work.
Thursday, September 07, 2006
Great Arcadia Home
Check out HomeInArcadia.com
This is a beautiful home in a great neighborhood. It features a lush yard which is perfect for entertaining. This one is not to be missed.
Saturday, September 02, 2006
Rite-Way Realty is looking for new agents
The Rite Team
The Rite Knowledge
The Rite Leadership
The Rite Experience
The Rite Values
The RITE-WAY
- Tuition Reimbursement
- Every associate has a Personal Mentor available 7 days a week
- One-on-One Training
- Free New Associate Fast Start Training
- Free Signs
- Free Business Cards
- Free Lead Generating Website with free home listings
- Free Lockboxes
- Free Technology Training
- Free Marketing Resources
- Free Weekly Coaching Sessions
We are a Learning-Based company where we help you start a career not just a job. Our focus is to help you develop your business. Due to our unique mentor program only a limited number of candidates will be accepted.
We are proud to offer a recruiting bonus of up to $1500 for each new associate you refer to Rite-Way Realty.
Call today for a confidential interview.
Tracy Thompson 623-326-0597 Director of Career Development and Training
http://www.AgentFastStart.com
The Rite Knowledge
The Rite Leadership
The Rite Experience
The Rite Values
The RITE-WAY
- Tuition Reimbursement
- Every associate has a Personal Mentor available 7 days a week
- One-on-One Training
- Free New Associate Fast Start Training
- Free Signs
- Free Business Cards
- Free Lead Generating Website with free home listings
- Free Lockboxes
- Free Technology Training
- Free Marketing Resources
- Free Weekly Coaching Sessions
We are a Learning-Based company where we help you start a career not just a job. Our focus is to help you develop your business. Due to our unique mentor program only a limited number of candidates will be accepted.
We are proud to offer a recruiting bonus of up to $1500 for each new associate you refer to Rite-Way Realty.
Call today for a confidential interview.
Tracy Thompson 623-326-0597 Director of Career Development and Training
http://www.AgentFastStart.com
Development Opportunity Available
Development parcel available near the Cardinals new stadium in Glendale. Fantastic opportunity for a luxury townhome development.
Photos and details:
7111N83rdAve.azhomebuyerhelp.com
Photos and details:
7111N83rdAve.azhomebuyerhelp.com
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